Slovenian drug maker Krka sees flat 2014 profit and trims sales forecast (updated)

Krka dd Novo Mesto

06/11/2014 12:40

* 9mo net up 2 pct at 127.4 mln eur on sales unchanged at 
858 mln 
    * Sees FY net unchanged on last year's 172.8 mln 
    * Sees FY sales about 1.2 bln euros vs previous 1.25 bln 
f'cast 
    * Cites lower drug prices and weaker east European 
currencies 
    * Shares down 0.8 percent 
 
 (Adds details, analyst quotes, share price) 
    By Marja Novak 
    LJUBLJANA, Nov 6 (Reuters) - Slovenian generic drugs maker 
Krka  KRKG.LJ   KRK.WA  has posted a 2 percent rise in 
nine-month group net profit and said it expected the full-year 
figure to be level with last year. 
    Net profit reached 127.4 million euros ($159 million) on 
sales which were unchanged at 858 million, due to lower prices 
of drugs and weaker east European currencies, Krka said in a 
statement on Thursday.  
    Last year's net profit was 172.8 million euros. Krka said 
the figure would remain unchanged in 2015 as well, while sales 
next year would rise by 5 percent to 1.26 billion euros. 
    The company said this year's sales would be about 1.2 
billion euros, slightly below its earlier forecast of 1.25 
billion. 
    "Decreasing prices of pharmaceuticals in all markets and the 
depreciation of east European currencies, mainly the Russian 
rouble and Ukrainian hryvnia, have (been) a key influence on 
sales figures," said Krka. 
    It said it was trying to offset that trend by increasing 
sales and intensifying marketing and sales activities. 
    Krka sells a quarter of its production to Russia, where 
sales were up by 2 percent in the first nine months, and 4.2 
percent to Ukraine, where sales fell 13 percent. 
    It said it planned to increase sales by 5 percent a year for 
the next four years, while expecting the number of employees to 
rise 4 percent to some 11,000 in 2015. 
    "Krka's profit figure is good, considering the situation in 
Russia and Ukraine, but its share price will not rise 
significantly until the crisis in that region is resolved," said 
Saso Stanovnik, chief economist at investment firm Alta Invest. 
    On the positive side, he said, the shares should not suffer 
a major drop unless stricter sanctions were enforced against 
Russia.  
    Krka said its investments would fall to 165 million euros 
next year from 175 million in 2014. Its shares lost 0.8 percent 
to 60.1 euros by 1155 GMT, while the blue-chip SBI index 
 .SBITOP  eased by 0.9 percent. 
    (1 US dollar = 0.7989 euro) 
 
 (Reporting by Marja Novak; Editing by Susan Thomas and David 
Holmes) 
 ((Marja.Novak@thomsonreuters.com; +386-8-205-6369; Reuters 
Messaging: marja.novak.thomsonreuters.com@reuters.net)) 
 
Keywords: KRKA RESULTS/